Knowing China through Taiwan

Finance

China's outstanding bonds amount to 50% of GDP

Staff Reporter

2012-11-30

16:44 (GMT+8)

Money-go-round. (File photo/Xinhua)

China's outstanding bonds are equivalent 50% of the country's GDP, according to Asian Development Bank, which also warns that though the local currency-denominated bond market is expanding among emerging Asian markets, operational risks are emerging.

Renminbi-denominated bonds have reached US$3.7 trillion as of September. The government's bonds accounted for US$2.7 trillion compared to corporate bonds of US$1 trillion, according to the Chinese-language Securities Daily.

China's bonds outstanding account for around half of the total in the East Asia region.

The bonds outstanding for Chinese businesses have amounted to 6 trillion yuan (US$964 billion), up 20.2% from a year earlier. Twenty-three of the top thirty companies issuing bonds are state-run enterprises.

Zhu Haibin, chief China economist at JP Morgan Chase, said Beijing's public investments including infrastructure have grown as well as the growth of the corporate bond market since August. The corporate bond market will become a financing channel for local governments due to stricter supervision of their financial policy and decreasing income from the sale of land.

GK Dragonomics, an asset research firm, said that the debt levels of Chinese companies have climbed to 122% of the country's GDP in 2012 from the 108% seen last year, the highest level for the past 15 years. Chinese companies are among those bearing the highest debt levels in the world, the research firm said.